The ACA’s Pre-existing Condition Regulations May Be Less Popular Than They Seem

The ACA’s pre-existing condition regulations lose support when the public learns the cost…

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Democrats pinned much of their hopes this election season on protecting Americans from pre-existing conditions from losing certain coverage mandates. In fact, about half of Democratic ads featured health care issues compared to less than a third of Republican ads

Much of the public debate centered on pre-existing condition protections assume that these regulations enjoy widespread public support.

Days before the 2018 midterms, 68% of voters said that health care is very or extremely important to how they plan to vote in this year’s elections, according to a new Cato 2018 Health Care Survey of 2,498 Americans.

However, the survey also finds that public support for pre-existing condition regulation plummets to less than half in favor when Americans are faced with the likely trade-offs and costs of these regulations, which goes against the widespread perception among the political punditry that pre-existing condition regulations are necessarily and universally supported by voters across the political spectrum.

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In the War on Drugs, patients and doctors are often the mistaken targets in the fight against the so-called opioid epidemic.

Study after study show a “misuse” rate of less than 1% in patients prescribed opioids for acute pain or chronic pain. And numerous large studies show an even lower overdose rate from opioids used in the medical setting.

Fear of opioids propels drug prohibition, the black market, and rising overdoses from heroin and fentanyl. It also drives the misguided prohibition on prescribing pain medication, causing patients to suffer and destroying lives.

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Paying Plasma Donors

About 83% of Canada’s immunoglobulin (used to treat several immune, blood, & neurological disorders) is made from plasma imported from U.S. for-profit plasma centers…

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The United States allows payments for plasma donors and the establishment of for-profit plasma centers. In contrast, payments to plasma donors are illegal in several provinces of Canada, and more provinces are considering bans. 

As a result, Canada relies on imported plasma from American paid donors to meet its need for plasma-derived therapies. For example, approximately 83% of immunoglobulin, which is used to treat several immune, blood, and neurological disorders, is made from plasma imported from American for-profit plasma centers.

Canadian policymakers justify the prohibition on compensation with moral considerations and with concerns about the safety of plasma collected from paid donors. 

However, 72.6% of survey respondents in Canada are in favor of compensating plasma donors. Among those in favor of legalizing compensation for donors, the highest-rated motive was to guarantee a higher domestic supply. The majority of the respondents who were in favor of legalizing compensation also agreed that compensation would not run against mainstream Canadian moral and societal values.

Roughly half of those who declared they were against payments reported that they would reconsider their position if the domestic supply and imports were insufficient to meet domestic demand, meaning that up to about 85% of Canadian respondents could actually be in favor of compensating plasma donors.

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New Rule Makes Obamacare Optional

Several changes to the terms of the Affordable Care Act have enabled more substantial health care choices for millions of Americans…

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At long last, the Trump administration has created a “freedom option” for people suffering under Obamacare. A final rulemaking issued last week reverses an Obama-era regulation that exposed the sick to medical underwriting. 

The new rule will expand consumer protections for the sick, cover up to two million uninsured people, reduce premiums for millions more, protect conscience rights, and make Obamacare’s costs more transparent.

It also frees consumers from Obamacare’s price controls, which are eroding coverage for the sick. Instead, consumers can purchase consecutive short-term plans, tied together with renewal guarantees that protect them from medical underwriting when they fall ill.

Renewal guarantees can even protect some 200 million consumers with employer-based coverage, or no health insurance, from medical underwriting — for just one-tenth the cost of Obamacare plans.

As President Trump’s profligate spending, trade wars, and farmer bailouts undo whatever good his tax cuts achieved, and as the inhumanity of his immigration policies tear at the hearts of parents everywhere, this one rule at least should embolden others within the administration to push these and other federal policies in the direction of individual liberty.

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Could Uber Help Reduce the Cost of Medical Care?

One ambulance ride can easily cost more than a thousand dollars — and it may not even be covered by insurance. Could ride-sharing services like Uber help?

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Despite its crucial, lifesaving role in emergency medical services, transportation by ambulance has grown more and more expensive for patients. One ride can easily cost more than a thousand dollars. Insurance often pays for only a portion of this fee, or even refuses to reimburse the patient if it considers transport by ambulance not medically necessary. Even if insurance were to fully cover the cost, many Americans have health insurance plans with high deductibles and so would be left to pay the entire bill.

Unnecessary ambulance use (when the patient could have taken a less expensive means of transportation without a reduction in health outcome) is partially due to lack of alternatives. Recently, though, alternatives have become available. Many individuals have started to seek cheaper transport from ride-sharing services such as Lyft and Uber. In addition, while ambulances prioritize patient safety and typically insist on transporting a person to the nearest hospital, ride-sharing cars allow the patient to pick which hospital to go to. This is important because farther facilities can have differing results for the same condition. Also, the closest hospital may not be in network for the patient, and therefore directing a ride-sharing vehicle to a farther hospital would lower the hospital bill itself as well.

Uber, initially a limo-hailing service, expanded into the ride-sharing industry with UberX in 2012. By May 2017, Uber had facilitated 5 billion rides in 76 countries and more than 450 cities. 

There is at least a 7 percent decrease in the ambulance rate from the time of UberX entry into a city. Given that this decrease happened so soon after the UberX introduction, ambulance companies likely did not adjust the size of their fleets, so UberX entry likely also led to a reduction in the time spent waiting for an ambulance for the remaining volume. Because a reduction of a few minutes can drastically improve the odds of survival for many serious conditions, that decrease could have caused a substantial reduction in loss of life.

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Telemedicine Is The Future. What’s Stopping It?

One of the most promising areas of medical innovation is the expansion of telemedicine, where medical professionals treat patients across great distances using electronic communications…

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Telemedicine allows medical professionals to treat patients across great distances, giving Americans increased access to quality health care while lowering its costs. However, the medical innovation has been hampered by the requirement that physicians hold licenses from each state in which their patients are located. These existing state-medical licensing laws are supported by entrenched special interests primarily concerned with protecting providers from competition, not providing better patient care.

Four possible reforms Congress could adopt to remove the existing barriers to telemedicine… 

1. The ideal solution is for the government to eliminate licensing of medical professionals altogether. This option would not compromise safety, as licensing doesn’t actually promote safety. Most patient protections actually come from private actors such as hospitals, health insurers, medical malpractice liability insurers, and others that evaluate physicians they allow to practice, reimburse, and indemnify.

2. Redefine the location of the interaction between patient and physician as being based on the location of the physician rather than the patient, a change which could be accomplished through state legislation or federal intervention. Medical professionals would be subject to the rules and regulations of their home state but would no longer bear the burden of tracking and complying with changes in licensing requirements across multiple states. Eliminating this costly and time-consuming process would allow for easier entrance into the market for telemedicine services. In addition, a single state-licensing board can more easily compile complaints related to a physician’s services and sanction errant physicians than can multiple medical boards, increasing patient safety.

3. Individual states can open their markets to physicians licensed in other states, or to join other states in reciprocal agreements to honor each other’s licenses. There has been some movement by states on this, as now a handful of states allow physicians in nearby states to practice medicine without a separate license.

4. The federal government could offer national telemedicine licenses. Such a system would not be a positive solution, as it would require a new federal agency, increased costs, and likely be susceptible to capture by physician groups that seek to erect barriers to telemedicine.

The Interstate Medical Licensure Compact, an attempt at reform, has failed to eliminate current obstacles to telemedicine. The program doesn’t create portable or interstate licensure. Instead, under the program medical professionals are still required to obtain a license from each state in which their patients reside. The Compact only attempts to streamline the process of applying for multiple nonportable state licenses.

The Compact protects the status quo — specifically the power of the state medical boards and the revenues that flow to them from physicians who must seek multiple licenses to practice telemedicine.

While telemedicine is growing in use and acceptance, state and federal licensing laws are keeping it from reaching its full potential. Policymakers should allow interstate telemedicine to flourish.

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Has Obamacare Made Insurance Cheaper?

One goal of the Affordable Care Act was to reduce the cost of health insurance. Has it? 

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One way Obamacare tried to reduce the cost of health insurance was by instituting minimum requirements on the share of premiums that commercial insurers must spend on medical claims. Known as the Medical Loss Ratio (MLR), this share is a measure of the actuarial fairness of insurance.

However, rather than reduce premiums, insurers increased their claims costs nearly one-for-one with their distance below the regulatory threshold.

On a state-by-state and market-segment-by-segment basis, insurers are required to maintain a MLR of at least 80% in the individual and small-group market segments and 85% in the large-group market segment, colloquially known as the “80/20 rule.” Federal regulation requires insurers to issue rebates to customers based on their realized MLR.

If an insurer collects $100 in premiums in the individual market, but spends only $79 paying medical claims that year, they are required to write a $1 check to policyholders. However, the insurer must bear the full administrative cost of keeping expenditures below $80 but reaps none of the rewards. That is, minimum MLR requirements encourage higher costs, not lower.

As a result, instead of causing a reduction in premiums in either the individual or group markets, Obamacare has incentivized insurers to cut administrative spending when the regulation was binding.

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Obamacare Lives On. Why?

Republican hopes to repeal Obamacare are all but officially dead, at least for now. This isn’t just a failure, this is an epic failure. This is the legislative failure by which all future legislative failures will be judged. But how did it come to this?

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When Republicans took power in January, they controlled both branches of Congress and the presidency, Obamacare was hugely unpopular with voters, and the health care law was spiraling into failure. Yet somehow, Obamacare not only survives, it is now more popular than ever. So, what went wrong?

1. It’s hard taking things away from people: Republicans tried hard to pretend that there were no losers under their proposals, but the public understood that, if you slowed the growth of Medicaid or reduced subsidies, some people would either pay more or get less. It was always going to be hard for Republicans to repeal or replace Obamacare even if they got everything else right. As we saw, they didn’t.

2. Institutional barriers: Provisions — like allowing the sale of insurance across state lines — were not only among the most popular Republican ideas, they were also important for making insurance more affordable. But, proposals such as this were not possible to include in the bill

3. No plan: For 7 years, every Republican running for president or Congress (or any other office for that matter) campaigned on opposition to Obamacare. Congress even voted some 50 times to repeal all or part of the health care law. But once the stakes became real rather than symbolic this year, it quickly became apparent that Republicans had no actual plan for what would replace Obamacare.

4. No Message: The average American has no idea what the Republican bill would do to their premiums, their coverage, their ability to see the doctor of their choice. There is a compelling case to be made for how free market health care reform can bring down costs, while improving quality and choice. No one ever made that case.

The Republican failure to repeal Obamacare suggests that the rest of their agenda, from tax reform to the budget is in trouble too. None of the dynamics are going to change. Democrats, firmly in “resist” mode, will remain adamantly against anything Republicans propose. 

The question, then, is whether the president and congressional Republicans have learned anything from this defeat. So far, there’s no evidence that they have.

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This Is Obamacare Expansion, Not Repeal

Given the response from Democrats and the media, you’d think Republicans were really about to repeal Obamacare. They’re not…

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Republicans have been promising full Obamacare repeal for seven years. That means repealing all of Obamacare’s regulations, mandates, bailouts and subsidies, including the entire Medicaid expansion. 

Last week, the Senate finally released the text of their long-awaited health care bill, the “Better Care Reconciliation Act.” The Senate bill is not even a step in the right direction. 

Like its counterpart, the House-passed “American Health Care Act,” the Senate bill would not repeal Obamacare. Indeed, it’s not even fair to call it a partial repeal or “Obamacare-lite.”

The Senate bill actually expands Obamacare, and its provisions would be worse than doing nothing to repeal the Affordable Care Act.

  1. It expands eligibility for Obamacare’s so-called “premium-assistance tax credits” to 2.6 million people in the 19 states that didn’t expand Medicaid, which is effectively a Medicaid expansion by other means.
  2. The Republican bill would expand Obamacare beyond what a Democratic Congress created. The Democratic Congress that enacted Obamacare authorized but did not fund those subsidies — which, a federal judge ruled, makes the Obama and Trump administrations’ payment of those subsidies to insurers unconstitutional. Rather than let those unconstitutional subsidies die, The bill would fund Obamacare’s “cost-sharing” subsidies — something not even Democrats ever did.
  3. Senate Republicans could be hiding that their bill would increase federal deficits and/or even increase actual spending on exchange subsidies. Senate Republicans ordered the nonpartisan Congressional Budget Office to “score” their bill against spending and revenue projections that overestimate the number of exchange enrollees and exchange spending. Comparing their bill to inflated spending estimates allows Republicans to spend more Obamacare money than honest budgeting would.
  4. Obamacare supporters would be able to blame the ongoing harm their law causes on free markets rather than the actual culprit.  Senate Republicans will claim that their bill repeals Obamacare and replaces it with free-market reforms. It does neither.

If this is the choice facing congressional Republicans, it would be better if they did nothing. 

Consumers would continue to struggle under Obamacare’s regulations, but those costs would focus attention on their source. The lines of accountability would be clearer if Republicans signed off on legislation that seems designed to rescue Obamacare rather than repeal and replace it.

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Embracing the Hard Realities of Health-Care Reform

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It is an old joke among health-policy wonks that what the American people really want from health-care reform is unlimited care, from the doctor of their choice, with no wait, free of charge. For Republicans, trying to square this circle has led to panic, paralysis, and half-baked policy proposals such as the Obamacare-replacement bill that passed the House last month. For Democrats, it has led from simple disasters such as Obamacare itself to a position somewhere between fantasy and delusion.

The latest effort to fix health care with fairy dust comes from California, whose Senate voted last week to establish a statewide single-payer system. As ambitious as the California legislation is, encompassing everything from routine checkups to dental and nursing-home care, its authors haven’t yet figured out how it will be paid for. The plan includes no copays, premiums, or deductibles. Perhaps that’s because the legislature’s own estimates suggest it would cost at least $400 billion, more than the state’s entire present-day budget. In fairness, legislators hope to recoup about half that amount from the federal government and the elimination of existing state and local health programs. But even so, the plan would necessitate a $200 billion tax hike. One suggestion being bandied about is a 15 percent state payroll tax. Ouch.

The utopian fantasy of a single-payer system is attractive to many voters, but it would destroy the American economy.

The cost of California’s plan is right in line with that of other recent single-payer proposals. For example, last fall, Colorado voters rejected a proposal to establish a single-payer system in that state that was projected to cost more than $64 billion per year by 2028. Voters apparently took note of the fact that, even after figuring in savings from existing programs, possible federal funding, and a new 10 percent payroll tax, the plan would have still run a $12 billion deficit within ten years.

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